Ecombd

Wednesday, May 17, 2006

Written by: S.M.Mehdi HassanChina has signed a 25 year contract with Woodside Petroleum Ltd, an Australian company, which runs the 14 billion Australian dollar North West Shelf gas project, to import LNG. It is the biggest contract made between any Australian company and China. The contract was finalized in 2002. Under the agreement the first shipment of LNG has been loaded at Karratha in the Pilbara region of West Australia. The shipment aboard the Northwest Sea Eagle will head to Shenzhen, one of the thriving industrial centers of China, situated next to Hongkong.The contract is worth $ 25 billion and under the agreement Australia will supply 3.3 million tons of LNG within the next 25 years. The major export products of Australia to China are: iron, ore and wool and now LNG. It has become the country’s third major export item. The first shipment will reach China by the end of this month to the Dapeng Terminal, built jointly by eleven corporations which includes domestic Chinese corporations and companies like British Petroleum, and China National Offshore Oil Corporation.Australia’s Acting Prime Minister and Trade Minister, Mark Vaile, who is at Karratha now is very excited about this contract. He said that their LNG companies had won a reputation for reliability and quality second to none and this contract reinforced that reputation. He also said that the shipment was a milestone in Australia's economic relationship with China and also helped Australia to acquire the top position among LNG supplying countries.At present, the Australian LNG executives are in China, preparing for the celebration. Australia and China has been doing trading for quite some time. However, until now there was a wide trade deficit between the two countries and the benefits were tilted towards China. According to the report of News.com.au, last year, the deficit was amounted to $6 billion. Australian officials are expecting that this contract will help to reduce the widening gap in trading between the two countries.